The Croatian Government is preparing to establish a comprehensive system for screening foreign direct investments (FDIs) by adopting the new Act on the Screening of Foreign Direct Investments (the "Act"). The Act will align the current Croatian legal framework with Articles 3 and 4 of EU Regulation 2019/452, ensuring compliance with European Union standards for investment screening. The draft Act is still not available to the public. According to the Croatian Government's plan of legislative activities for 2025, the new Act and its implementation are now in the hands of the Ministry of Finance, with finalisation expected in the first quarter of 2025 (available at: https://esavjetovanja.gov.hr/Econ/MainScreen?entityId=29008).
Current regulation of foreign direct investments: The Regulation on the Implementation of EU Regulation 2019/452 entered into force on 2 October 2020. This implementing regulation only established the National Contact Point and the Interdepartmental Commission as the competent authorities for a coordination mechanism under the EU FDI Screening Regulation. It did not introduce any screening mechanism.
What will the new Act bring? As provided in the plan of legislative activities for 2025, key provisions of the new Act will cover the scope of critical infrastructure and activities subject to screening, the responsibilities of state authorities and public bodies, notification requirements, confidentiality and data protection measures, and transparent decision-making timelines. By establishing this mechanism, Croatia aims to safeguard its critical infrastructure and to transparently and efficiently evaluate the potential risks posed by foreign investments in accordance with EU standards. Given that the draft text is still not publicly available, the exact content of the regulation remain unknown.
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